Identifying demand factors for promotional planning and forecasting: A case of a soft drink company in the UK
In recent years, promotions have become a common practice in many retail outlets. Usually these promotions are planned collaboratively by manufacturers and retailers, who jointly agree on the products on promotion, the types of promotions, the price reduction and the timing of promotions. But, the sales can also be influenced by other factors such as weather, holiday periods and festivals, which are sometimes overlooked. In this research, we identify a set of demand factors influencing the sales of a leading soft drink company in the UK. We relate the demand factors with the company's actual sales to gain more insight into the underlying demand structure. We use structural equation modelling for this purpose. The results confirm the role of the promotional factors in the sales uplift for all products. However, the other demand factors are found influential only for some products. Our results suggest different demand structures for different product families, and our findings confirm the importance of collecting and exchanging the proper supply chain information. Our approach may also assist managers to better plan, forecast and promote different products in collaboration with other supply chain partners.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Prasad A. Naik & Kalyan Raman & Russell S. Winer, 2005. "Planning Marketing-Mix Strategies in the Presence of Interaction Effects," Marketing Science, INFORMS, vol. 24(1), pages 25-34, June.
- Gérard P. Cachon & Marshall Fisher, 2000. "Supply Chain Inventory Management and the Value of Shared Information," Management Science, INFORMS, vol. 46(8), pages 1032-1048, August.
- Baohong Sun, 2005. "Promotion Effect on Endogenous Consumption," Marketing Science, INFORMS, vol. 24(3), pages 430-443, July.
- Ryu, Seung-Jin & Tsukishima, Takahiro & Onari, Hisashi, 2009. "A study on evaluation of demand information-sharing methods in supply chain," International Journal of Production Economics, Elsevier, vol. 120(1), pages 162-175, July.
- Magid M. Abraham & Leonard M. Lodish, 1987. "Promoter: An Automated Promotion Evaluation System," Marketing Science, INFORMS, vol. 6(2), pages 101-123.
- Li, Xiuhui & Wang, Qinan, 2007. "Coordination mechanisms of supply chain systems," European Journal of Operational Research, Elsevier, vol. 179(1), pages 1-16, May.
- Harikesh Nair & Jean-Pierre Dubé & Pradeep Chintagunta, 2005.
"Accounting for Primary and Secondary Demand Effects with Aggregate Data,"
INFORMS, vol. 24(3), pages 444-460, November.
- Nair, Harikesh S. & Dube, Jean-Pierre & Chintagunta, Pradeep, 2004. "Accounting for Primary and Secondary Demand Effects with Aggregate Data," Research Papers 1949, Stanford University, Graduate School of Business.
- Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
- Kim, Soo Wook, 2009. "An investigation on the direct and indirect effect of supply chain integration on firm performance," International Journal of Production Economics, Elsevier, vol. 119(2), pages 328-346, June.
- Byrne, P.J. & Heavey, Cathal, 2006. "The impact of information sharing and forecasting in capacitated industrial supply chains: A case study," International Journal of Production Economics, Elsevier, vol. 103(1), pages 420-437, September.
- Jean-Pierre Dubé, 2004. "Multiple Discreteness and Product Differentiation: Demand for Carbonated Soft Drinks," Marketing Science, INFORMS, vol. 23(1), pages 66-81, September.
- Robert C. Blattberg & Alan Levin, 1987. "Modelling the Effectiveness and Profitability of Trade Promotions," Marketing Science, INFORMS, vol. 6(2), pages 124-146.
- Raju, Jagmohan S., 1995. "Theoretical models of sales promotions: Contributions, limitations, and a future research agenda," European Journal of Operational Research, Elsevier, vol. 85(1), pages 1-17, August.
- Yossi Aviv, 2007. "On the Benefits of Collaborative Forecasting Partnerships Between Retailers and Manufacturers," Management Science, INFORMS, vol. 53(5), pages 777-794, May.
- Srinivasan Raghunathan, 2001. "Information Sharing in a Supply Chain: A Note on its Value when Demand Is Nonstationary," Management Science, INFORMS, vol. 47(4), pages 605-610, April.
- Lee G. Cooper & Penny Baron & Wayne Levy & Michael Swisher & Paris Gogos, 1999. "PromoCast™: A New Forecasting Method for Promotion Planning," Marketing Science, INFORMS, vol. 18(3), pages 301-316.
- Jean-Pierre Dubé & Sachin Gupta, 2008. "Cross-Brand Pass-Through in Supermarket Pricing," Marketing Science, INFORMS, vol. 27(3), pages 324-333, 05-06.
- Arshinder & Kanda, Arun & Deshmukh, S.G., 2008. "Supply chain coordination: Perspectives, empirical studies and research directions," International Journal of Production Economics, Elsevier, vol. 115(2), pages 316-335, October.
- Sari, Kazim, 2008. "On the benefits of CPFR and VMI: A comparative simulation study," International Journal of Production Economics, Elsevier, vol. 113(2), pages 575-586, June.
When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:128:y:2010:i:2:p:538-545. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.